Relief for Commercial Tenants…. Or Is It?
NSW commercial tenants significantly impacted by COVID-19 will have greater protection from evictions with the state government set to enact the National Cabinet Code of Conduct with $220 million of the $440 million land tax relief package.
The measures will apply to commercial leases where the tenant is in financial distress due to COVID-19, including but not limited to shops, cafes, gyms, hairdressers, restaurants, offices, warehouses and industrial sites.
Commercial landlords will be offered the land tax concession if they pass the savings on to tenants through a rent reduction.
Eligible landlords will be able to apply for a land tax concession of up to 25 per cent of their 2020 (calendar year) land tax liability on relevant properties. A further land tax deferral for any outstanding amounts for a three-month period will also be offered to landlords who claim the land tax concession.
The Government will give effect to the Code of Conduct, which will operate for a temporary period during the pandemic, and include the following key measures:
- Landlords must negotiate rent relief agreements with tenants in financial distress due to COVID-19 by applying the leasing principles in the Code;
- A ban on the termination of a lease for non-payment of rent;
- A freeze in rent increases.